Business

Quiznos tries again to restructure debt

A Quiznos worker makes sandwiches in Lower Downtown. The Denver-based chain is negotiating with creditors to restructure its debt load. (Denver Post file)

Quiznos is trying to restructure its debt for the second time in two years as the once-booming sandwich chain continues to falter.

The Denver-based chain, known formally as QIP Holder LLC, which acquired a hefty debt load as part of a leveraged buyout in 2006, is negotiating with creditors — who have hired bankers and lawyers — to restructure some or all of its roughly $600 million debt load, people familiar with the matter said.

Those talks have led to a forbearance agreement with the creditors designed to give Quiznos more time to hash out a deal, Quiznos chief executive Stuart Mathis said in a memo Wednesday to franchisees that was reviewed by The Wall Street Journal.

A person familiar with the matter said the company didn't make a payment on a loan, and this agreement allows the company to maintain its liquidity as negotiations with lenders progress. Such agreements generally involve creditors not taking action against the company, such as postponing or reducing debt payments for a specified time.

"We have reached an agreement with our lenders and equity partners, and look forward to continuing to work constructively together to establish a framework that will position Quiznos and our franchisees for future growth and success," Quiznos said.

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